Dallas Buyers Club has to pay a $600,000 bond for details of illegal downloaders

A scene from the Oscar-winning film Dallas Buyers Club Photo Credit: Anne Marie Fox / Focus Features

The Australian Federal Court has smacked down the copyright owners of Dallas Buyers Club saying they need to hand over a $600,000 bond to get the names and addresses of Australians who allegedly illegally downloaded the movie.

Justice Nye Perram wants the bond to stop the company issuing speculative invoices, a practice in which copyright holders issue invoices to individuals at a higher amount than the damage caused with a threat of legal action if the recipient doesn’t pay up.

The decision is the first major setback for the film company behind Dallas Buyers Club, DBC LLC, which won a landmark Australian legal case against iiNet and other Australian internet service providers in April, with the Federal Court ordering the ISPs to reveal the names and addresses of 4726 customers who allegedly downloaded the film illegally.

But one of the conditions imposed by Justice Perram was that the court sign off on any letter about copyright infringement DBC LLC planned to send to the alleged pirates.

The company fought against revealing the contents of the letter, which was due to be submitted in draft form by May 21. A month later, the details emerged during further legal debate. It did not cite a figure for compensation, instead saying:

Unless you call the above telephone number to speak with someone directly about negotiating a settlement, then please respond to this letter, in writing, to [insert email address], within 28 days from the date on the front page of this letter.

If you do not, then court action may be commenced against you without further notice.

Today the Federal Court refused an application from the copyright holders to force the ISPs to hand over the customer details unless the bond was paid.

Justice Perram said he had rejected “several versions” of the letter because its demands were excessive. He imposed the bond because he feared DBC would not comply with the court’s directives and they were beyond the reach of the Australian legal system.

“Because DBC has no presence in Australia the court is unable to punish it for contempt if it fails to honour that undertaking,” he said.

The $600,000 was designed as a disincentive so that “the potential revenue it might make if it breached its undertaking to the court not to demand such sums… it will not be profitable for it to do so,” Justice Perram said.

The decision is the first big win for the ISPs, which also include Internode, Adam Internet, Dodo, Wideband and Amnet Broadband. The ISPs had already been told to pay 75% of the film company’s legal costs.